Michael Gracie » Countrywide

Countrywide’s “Other Friends” - Fannie Mae and Freddie Mac

Michael Gracie — Wed, 23 Jul 2008 14:27:24 +0000

Trying to defend the mortgage giants, Paul Krugman of the New York Times recently wrote, “What you need to know here is that the right — the WSJ editorial page, Heritage, etc. — hates, hates, hates Fannie and Freddie. Why? Because they don’t want quasi-public entities competing with Angelo Mozilo.”

That’s a howler even by Mr. Krugman’s standards. Fannie Mae and Mr. Mozilo weren’t competitors; they were partners. Fannie helped to make Countrywide as profitable as it once was by buying its mortgages in bulk.

And cracks are appearing that show this to be true.

Tuesday’s financial links

Michael Gracie — Tue, 22 Jul 2008 16:00:50 +0000

Just numbers

PIMCO’s Bill Gross says Fannie Mae and Freddie Mac mortgages are ‘excellent’. Why would he say anything else?
AMEX’s high-end borrowers are battening down the hatches, and it’s causing the lender some problems.
An Apple (AAPL) analyst makes a call, and it is spot on.
Countrywide’s reach goes even deeper - “Friends of Angelo” are seeping out of the woodwork.
Dont’ ~~cheat~~ be lazy with your hedge fund job application.
Bank of America is buying Countrywide assets but leaving its creditors behind? Watch and learn.

and…

Paypal competitors beware - few survive, and the rest wind up in prison.

Monday Morning’s Weekend in Review

Michael Gracie — Mon, 16 Jun 2008 16:13:05 +0000

~~Linkfest~~ ~~Link Barrage~~ Tidbits on real estate and oil, since this last weekend was about sun and fun (at least around here).

After reporting homes sales were up 4% in New Jersey for the first quarter, the NAR decided that was a tad too optimistic. Revised first quarter…down 30%. As it turns out, a member agent pointed out the error of the NJ faction’s ways. I told you agents were getting pissed.
The Washington Post is running a three-part series on the housing meltdown, just in case real estate agents, homeowners, investors, etc. still believe the NAR propaganda (i.e. it’s all the press’s fault).
Countrywide’s Congressional Mortgage Discount Club does not exist. Any thinking to the contrary is “outrageous.”
David Merkel hands out a few notes on crude oil. Up front, and of particular interest, is the rail against government action to discouraging speculation. Mentioned previously.
The whole oil mess might be a non-issue anyway - scientists have discovered bacteria that eat garbage and “poop” oil. Will the debate over abiotic oil heat up from here?
Peak oil or no peak oil, Donald Rumsfeld isn’t waiting around to find out. He bought a Vespa.

Adieu.

Sleazy Friday Links

Michael Gracie — Fri, 13 Jun 2008 17:41:14 +0000

Getting ready for the weekend

Government officials got big loan discounts from Countrywide. “Friends of Angelo” included, who else, but the heads of congressional banking and finance committees. Note - these folks voted for a government mortgage bailout plan, and no wonder - they’re getting foreclosed on.

Voted “Best Value From Your Stimulus Check”:

To hell with retail purchases - get “more bang” for your stimulus check dollar. A new “core inflation” measure is just around the corner…ex food and energy and sexual favors.

And last and least:

A judge recuses himself from obscenity case over a purportedly obscene website, but it seems what was truly obscene was the media’s lack of fact finding standards. The media will continue to cry about the internet killing them, never understanding the simple truth - their product is for shit.

Countrywide deal has $160 million termination fee

Michael Gracie — Thu, 17 Jan 2008 23:57:59 +0000

When I first read the headline, I thought fair enough - if Bank of America backs out they should pay a breakup fee.

But alas, it’s Countrywide that will be doing the paying.

Potentially scary for the troubled mortage lender. While we don’t have full details, you might expect to see some type of minimum net asset clause and/or litigation contingencies in the deal sheet, meaning if Countrywide happened to have more skeletons in the closet they would wind up paying for it.

UPDATE: The Wall Street Journal agrees, and also notes that Countrywide stock price reflects a decent amount of skepticism.

BoA in Talks to Buy CountryWide Financial

Michael Gracie — Thu, 10 Jan 2008 20:55:10 +0000

Trading Rule #1: Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position.

Yep. Number two would cut losses quickly, and number three would be double up on your winners. Even casual casino gamblers can win, if they do this while understanding and following game fundamentals.

UPDATE: The deal is now underway - it’s an all equity transaction at a hair under one share of B of A for each five shares of Countrywide priced out at around $7.20. CFC fell to $6.33 by the end of the day today, which could suggest some think the transaction will wind up more dilutive to B of A shareholders than management does. Meanwhile, Robert Shiller is questioning the whole deal - you can’t help but believe such skepticism has a solid foundation attached when it comes from him.

Countrywide CEO - Selling shares and pitching bigger subsidies

Michael Gracie — Fri, 07 Dec 2007 17:53:27 +0000

You can’t make this stuff up.

Via Reuters:

Countrywide Financial Corp Chief Executive Angelo Mozilo sold some of his shares in the No. 1 U.S. mortgage lender to handle matters relating to his estate and retirement, former Countrywide board member Henry Cisneros said on Fox Business Network on Wednesday…

Mozilo has realized more than $100 million of gains in the last year since he began selling shares on a regular basis last October, just as the U.S. housing market was cresting. He later accelerated the pace of those sales twice.

Meanwhile…

Countrywide Financial Corp’s chief executive called on the U.S. Congress to temporarily raise the maximum size of mortgages that Fannie Mae, Freddie Mac and the Federal Housing Administration may buy or insure by 50 percent to $625,000…

Any increase in the cap should benefit Countrywide, which now primarily makes home loans that Fannie Mae and Freddie Mac can buy.

Admittedly, the stock needs help.

UPDATE: Adding insult to injury, the company is still promoting low-money-down loans. What the heck - someone else takes the heat anyway.

UPDATE 2: More suffering, and more predicted, from the very ones now being hornswoggled into picking up the “slack.”

Countrywide CEO Cashed Out

Michael Gracie — Mon, 01 Oct 2007 05:20:51 +0000

Not everyone was feeling the pain of the downward spiral in the mortgage markets. Meanwhile…

Calabasas-based Countrywide, the nation’s largest mortgage lender in terms of volume, faces a lawsuit claiming it failed to warn employees about the depth of its financial troubles, resulting in heavy stock losses in their 401k retirement accounts.

Sounds familiar.

Is Countrywide’s next stop DIP financing?

Michael Gracie — Tue, 11 Sep 2007 15:37:23 +0000

After liquidity trouble, Countrywide was cut short in the commercial paper market - hence yield skyrocketed. They found a savior in Bank of America, and that deal likely included some restructuring directives, including but not limited to canning up to 12,000 employees.

Now it looks like it may not be enough - the company needs yet more capital to keep the wheels spinning, and the WSJ is now suggesting that the Bank of America “coup” could turn out less than angelic.

I’ll take a wild guess that Countrywide’s longer-term securities experience a little bump in interest, and that the next turn in this saga’s financing story is accompanied by a yellow sign with the letters “D-I-P” imprinted on it.

Countrywide Bonds Offer Juicy Yield for the Hearty

Michael Gracie — Thu, 16 Aug 2007 18:02:10 +0000

The news today…Countrywide’s drawdown on short-term credit facilities, I guess to cover for the fact nobody is buying loans. The funny headline…Countrywide Bonds Offer Juicy Yield for the Hearty. Hearty indeed.

Talking with a friend earlier about the risks of shorting the broad market, we agreed that if KKR (or anyone else for that matter) gets one deal out the door, the indexes could turn on a dime. Still, they said they weren’t buying any of this Countrywide paper. What’s their business? Buying high yield paper.

Heh.

UPDATE: Yes, turn on a dime…on buyout speculation.

UPDATE2: B of A bought preferred stock with a juicy yield instead.